A project has average estimated cash flows of $3,000 per year with an initial investment of $9,000. Depreciation is straight-line with no residual value and the project has a six-year life span. The company has a target return on capital employed (ROCE) of 28% and a target payback period of 2.5 years. ROCE is based on the average investment.

Under which investment appraisal method(s), using the company's targets, will the project be accepted?

Answer rating: 100% (QA)

Given the projects average estimated cash flows of 3000 per year an initial investment of 9000 and a ... View the full answer